Jackson Hole: Bernanke Speaks

Chairman Bernanke will be speaking at Jackson Hole, Wyoming tomorrow at 10:00am. He is due to deliver a speech entitled “Monetary Policy Since the Crisis”.

If he mentions anything concerning stimulus, increased volatility can be expected.

We may think that Bernanke would wait until their next FOMC meeting in September to speak specifically about upcoming monetary policy but at Jackson Hole in 2010, “additional stimulus” was spoken of four times and later manifested as QE2. Also, in the last FOMC minutes report we heard that more stimulus could be justified if there is no improvement in the economy soon.

Those who doubt a QE3 mention have a very legitimate reason. Bernanke’s speech is on “Monetary Policy Since the Crisis”. Therefore, rather than hinting at potential monetary policy, Bernanke could just be extensively reviewing the past couple years of the Fed’s policy.

Henry Lui, a trusted voice in the Forex fundamental analysis world has an article concerning tomorrow’s speech also. He thinks it is unlikely that Bernanke will mention QE3 but, if this scenario takes place the “USD should be sold off sharply”. Read it by clicking here.

I personally think the upcoming election plays a role in his decision to make a statement concerning the QE3. It’s possible that Bernanke might not only be waiting until the next FOMC meetings but may be waiting until after the election to keep the markets calm.

If Bernanke does lead us to believe QE3 is soon-to-come. Dollars bears, let’s go!

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